News
31 May 2016 02:00pm

EU referendum and rising costs top concerns for retail CEOs

The EU referendum, rising costs and changing consumer demands are the biggest concerns for UK retail and consumer companies, PwC has found

According to the survey, chief executives named changes in consumer demands and the introduction of the national living wage as the main factors which will have the biggest impact on their businesses within the next year.

Meanwhile, rising costs, the national living wage, the impact of the EU referendum, over-regulation, cyber threats and the speed of technological change were identified as the top threats to their businesses growth prospects.

Respondents said their top concerns regarding the EU referendum were rising costs, squeezed margins and the impact on imports from the EU in case of a Leave vote.

Despite the concerns, 94% of the 37 chief executives surveyed said they were confident about their revenue growth over the next three years, while 60% were optimistic about the growth of the retail and consumer sector as a whole over the same period.

However, only 29% of them were confident about the sector’s future over the next six months.

According to the survey, retail chief executives believe a vote to remain in the EU would have the best impact on consumer confidence, with 57% of respondents saying their growth plans depend on the outcome.

Madeleine Thomson, UK retail and consumer leader at PwC said, “It isn’t easy. At the same time as weathering economic and political uncertainties, and grappling with the outcome of the EU referendum, retailers have to keep up with emerging trends, anticipate consumer needs, and manage across a wide range of different channels.”

As a result, Thomson said retail and consumer organisations must work on simplicity, trust, innovation and the customer experience to give a “solid foundation for growth in an intensely competitive industry”.

They also need to shift away from the traditional trip to the high street and invest in mobile phone technology, online sales and deliveries and shop-and-collect services.

Also on Tuesday, this month’s Lloyds Bank Business Barometer said the percentage of companies who thought their business would improve within the next year fell by 11 points to 38%, the lowest level since 2013. Business confidence also fell by six points to 32% this month.

Jessica Fino

 

Related articles

EU referendum uncertainty drags business confidence down to four year low

UK business confidence falls

EU referendum top concern for UK CFOs

Skills shortage and workload management top CFOs' concerns

Topics